I'm currently running OS X version 10.7.4 and iTunes 10.3.1 -- I noticed iTunes 10.6 has the coveted full-screen mode, but I've updated everything in Software Update and there is still no mention of any upgrades to iTunes. Is it possible my hardware doesn't support iTunes 10.6? I'm using an early 2008 Macbook with an Intel GMA X3100, but that shouldn't make a difference to iTunes. Any other possible reasons why I wouldn't be able to update?
I don't know whether Apple delivers these upgrades via Software Update at all (maybe just the minor ones). But you can easily download the current version of iTunes directly from Apple's iTunes page.